A few weeks ago I discussed the importance of intial planning before you get to creating your marketing budget. This blog will discuss how to build a strong marketing budget.

Marketing budgets vary greatly and require common sense and experience to accurately forecast. Generally, a range of 4% to 6% of total sales revenue will go toward marketing a project or portfolio (including all internal sales team and Realtor commissions).

Also, execution approaches will differ greatly…Selling a downtown high rise will vary greatly from selling a small surburban woodframe product. A large scale project may have a much lower marketing budget in terms of % of revenue compared to a smaller project. A destination project may be much more costly to promote compared to highly visible location. A solid marketing and sales company will therefore allocate the appropriate budgets to execute the agreed upon marketing plan for that specific project and product type and consider time-lines, sales velocity, closing ratios, etc.

This will ensure that you have adequate funds for the lifespan of the project which is crucial in navigating a changing market such as we now find ourselves. In addition, it creates more financial transparency across divisions of the project, in essence, the financiers become privy to the realities and complexities faced in marketing and selling the project.

Stakeholder input is another great by-product of a strong budget breakdown. It puts numbers to initiatives and allows more analytical minds to interpret return on investment in clearer terms. If their are objections or concerns, now is the time for the stakeholders to voice them.

So what does a detailed budget from a sales and marketing perspective entail? Again it will vary from project to project, but a short list will include: market research, graphic design fees, marketing materials, uniforms, photography, presentation centre design, model, office equipment, sales center landscaping, display costs, public relations, media, signage, administration staff, legal fees, events, customer service programs, commissions, MLS fees, database costs, and contingency. Ideally, MAC likes to implement a line item tracking system that allocates month-to-month dollar allocation over a minimum 1-year time frame. This allows our development partners to plan their product expenditures and cash flow appropriately.

With the dollar amounts and time-lines established and a tracking system in place you are ready to push the button on a program of success.

Happy Selling!

Cameron McNeill